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Colorado's fracking bans could fall before courts

Edward McAllister
Thursday, 7 Nov 2013 | 5:40 PM ET

NEW YORK, Nov 7 (Reuters) - For environmentalists, votes this week to ban fracking in three Colorado cities may prove symbolic victories at best, as two decades of legal precedent suggests drillers can successfully contest the bans in court, experts say.

In elections on Tuesday, the cities of Boulder, Lafayette and Fort Collins voted to suspend or ban fracking, which environmentalists hoped would strengthen opposition to the drilling process.

But in Colorado, which has been a hub of energy production for decades, a number of cases have established that local municipalities may not halt energy drilling. Attorneys versed in Colorado law say the votes will likely be overturned should they be pursued in court.

In 1992, the Colorado Supreme Court struck down a drilling ban implemented by the City of Greeley, known as the Voss versus Lundvall Brothers case, upholding the Oil and Gas Conservation Act that prevents local oil and gas drilling bans.

"It is highly likely that the court would find that the prohibition of hydraulic fracturing is unlawful under state law," because of prior rulings in Colorado, said David Neslin, former director of the Colorado Oil and Gas Conservation Commission and partner at Davis Graham & Stubbs law firm in Denver.

Colorado, where energy production has rocketed in recent years and thousands of wells dot the landscape, is unlikely to face the kind of widespread bans that have halted progress for drillers most notably in New York where a statewide moratorium has halted fracking since 2008, they said.

Earlier this year, Colorado Governor John Hickenlooper joined a lawsuit filed by the Colorado Oil and Gas Association, an energy lobby group, against the city of Longmont, which has voted to ban drilling in the energy heartland of northern Colorado.

With that case ongoing, it is unclear if the governor will seek to overturn these latest bans. A spokesman for the governor's office said there "may or may not be" cases filed.

"It would be up to a court to determine the legality of the bans if additional lawsuits are filed," he said.

DRILLING BOOM, LEGAL CLASHES

The United States has experienced a drilling boom in recent years as energy firms found cheaper ways to extract oil and gas from shale rock deposits using fracking and horizontal drilling.

In Colorado, home to the Niobrara shale and other such deposits, gas and oil output has risen to record highs. Oil production exceeded 49 million barrels in 2012, a 25 percent increase over 2011, according to the Colorado Oil and Gas Conservation Commission. There are more than 50,000 active wells in the state, government data show.

But environmentalists are concerned that fracking, which involves pumping millions of gallons of chemical-laced water deep underground, can contaminate fresh water sources and have negative health impacts.

Still, in a state where drilling is on the rise, some say towns are better off trying to ensure safeguards for drilling rather than voting for outright bans that could face legal opposition.

Making sure drilling is set back from schools and homes, and enforcing stricter drilling rules could reap more rewards, said Jenna Keller, an attorney who represents farmers and ranchers for Otis, Coan and Peters law firm in nothern Colorado.

"Going for that all out ban may mean they have nothing in place, that is the disappointing thing maybe coming down the road for some of these municipalities," Keller said.

(Reporting by Edward McAllister; Editing by Leslie Gevirtz)